Privatise Air India before it’s too late
I blame Morarji Desai.
Readers of a certain age will remember the circumstances in which Morarji Desai lit a match to a slow fuse that was certain to destroy Air India. It happened this way:
In 1977, when the Janata government took office after the end of Indira Gandhi’s Emergency, it sought to punish those it regarded as collaborators with the Emergency regime. For reasons that are still not clear, Morarji Desai regarded J.R.D. Tata as one such collaborator.
Being Morarji Desai — by which I mean, a bit of a crank and a nutcase — he chose not just to punish JRD but also to punish Air India. So, he sacked JRD as Chairman of Air India.
By 1977, Air India had already been a public sector undertaking for many years. But it had retained its cachet as one of the world’s best airlines largely because the government had been content to let JRD oversee its operations as non-executive Chairman.
The chairmanship of Air India was a labour of love for JRD. The Tatas stood to gain nothing from Air India’s success (and indeed, many Tata grandees complained that JRD spent too much time on Air India) and JRD himself accepted only Re 1 a year as salary.
But the best kind of management is the kind that emerges out of love and passion. JRD was obsessed with Air India. He regarded it as his own child and in an interview in the early 70s said that of all the many things he had achieved in his life, the one he was proudest of was Air India.
Morarji Desai was more vindictive than he was perceptive. It never occurred to him that while the loss of the Air India chairmanship might break JRD Tata’s heart, it made no difference to the fortunes of the Tatas.
On the other hand, it destroyed Air India.
Once JRD went, the babus moved in. Air India became the plaything of the civil aviation ministry and the handmaiden of the government, used and abused by ministers and bureaucrats.
Even when Indira Gandhi returned to power, in 1980, there was no concerted effort to restore Air India to its old position of functional autonomy. The choice of chairman was left to R.K. Dhawan and he chose Raghu Raj, a former banker who had wanted to be Governor of the Reserve Bank but was given Air India as a consolation prize.
If the Chairman of Air India owes his job to the Prime Minister’s private secretary, then that tells you all you need to know about the equation between the government and the airline. And soon, ministers worked out that Air India could be their personal piggy bank. Every aeroplane purchased yielded a kickback of many crores; every Airbus leased guaranteed some bureaucrat’s fortune; and every general sales agent appointed meant suitcases full of lakhs.
There were some bright spots and some good appointments (Yogi Deveshwar, for instance) but the rules were clear. Whereas once the Chairman of Air India had been the mighty JRD Tata, all future chairmen would report, in effect, to some joint secretary in Delhi. When chief executives tried to assert their independence, the ministry encouraged politics within the airline. And in one scandalous instance, one of Air India’s brightest Managing Directors, Michael Mascarenhas, was victimised and persecuted by the civil aviation minister.
Almost every thing that has gone wrong with Air India in the last few decades can be traced back to that disastrous act of vindictiveness on Morarji Desai’s part. If you run your country’s flag carrier like a government department, a decline is inevitable.
There are other consequences too. JRD believed — to his cost — that he would run Air India forever. So every decision he took was made on a long-term basis. He cared less for short-term profit (and nothing for kickbacks) and more for building the brand and establishing Air India’s reputation. Ministers, on the other hand, knew that they had the job for two or three years at the most. So, they had no interest in the long term. They just bled the airline dry while they could.
As the rot set in and decline continued, the vast majority of Air India staff decided that they didn’t really care what happened to the airline either. As far as they were concerned, they had done their best and given it everything they had. But still, the airline continued to lose money because of inept management, political interference and plain old corruption. In such a situation, why should they continue to work their butts off when their efforts would come to nothing?
That change in mindset and collapse in morale have ensured that even when a few well-intentioned ministers (including Praful Patel) and chief executives have attempted to turn the airline around, these initiatives have always failed. You cannot run a company in the service sector if your staff no longer believes in service or in the long-term prospects of the airline.
That’s the problem the present management faces. When the new Chairman tells the staff that their airline is bankrupt and that it is up to them to make sacrifices, their response is succinct: Air India is bankrupt because chief executives and politicians have robbed it blind; why should we be the ones to make sacrifices?
It is a question to which no chief executive or minister can give a satisfactory answer. Why should a pilot agree to take half his salary when he knows that the airline’s problems have nothing to do with him? Why should staff give up their perks when they know where the money has gone?
As somebody who loves Air India and who believes that the airline still has a core of dedicated and outstanding (if increasingly disillusioned) professionals, I find the situation deeply tragic..
I wish Praful Patel and the new Chairman luck but the truth is that nothing they do will amount to much more than putting a band-aid on a gaping wound. As long as the government runs Air India, it will continue to strangle it.
So, what’s to be done?
It’s obvious really: privatise Air India.
It should have been done a long time ago. The BJP government was too obsessed with trying to prevent Naresh Goyal from buying it. And then, it refused to sell it to the Tatas who were interested. This government — allegedly a government of reformers — has, to its eternal shame, not made any moves towards privatisation.
So, yes, I blame Morarji Desai. But I blame other Prime Ministers too.
It is almost too late for Air India. Let’s try and save it before it dies. And the only way to save it is for the government to finally let go.
4TH OCTOBER 2009
The views expressed by the author are personal